This is the weekly Energy Sector financial summary.
The Weekly Energy Report attempt to see the big trends in the energy sectors1.
At the moment, the report is build around 116 companies. You can see their tickers, names, sectors and sub-sectors at the end of the report. Also, the focus is really on North-American Oil & Gas companies. We will address this shortcoming soon by adding more European and Asian energy companies to the mix as well as diversifying the industries to include uranium, electricity generations, renewable energies and industrials2.
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Records export of crude out of the US. Mostly to China. The US is taking another piece of the market away from Russia and OPEC producers. The US is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia
A bit more news on the 22 June meeting. Saudi does not want to upset too much its old customers who are complaining after a 50% increase in oil price in 12 months but it still want to balance its budget. So for KSA a small increase in oil output is ok. For Russia in return they want a big increase in output because they have invested heavily in their export infrastructures (pipelines to Europe, Turkey). Russia would be happy with $60 per barrel. Saudi doesn’t want over $80 but is happy with that price. The rest of the OPEC members might want to see prices high to keep their mass happy. See what happen in Brazil when oil prices increases and oil have been subsidize for so many years? So I’m leaning for just a small decrease in price. Let’s cut KSA and Russia wishes in half… we’ll go to $70 ;-)
Halliburton has been selected by Aramco to bring up the shale gas from Saudi at cheaper price. With the US now exporting so much to Saudi Arabia (Oil exploration skills, loads of weapons and missiles), I am wondering why Uncle Donald is not talking about faireness of trade there!
The success of shale oil drilling is creating pipeline constraints in the US (nothing new(s) here) but the consequence is that the WTI has been trading $11 lower this week comparing to the Brent. Biggest spread since 2015. All the pipelines are at full capacity. This is actually good for KSA and Russia as the US has now a cap on what it can export.
European Oil Majors keep investing in renewable energy Cies. This week was BP buying an Isreali Cie that manufacture ultra fast charging battery. Think about it as buying a position in the electric vehicle technology. But before that was Shell divesting this year from the Canadian Oil and buying Sands NewMotion, a Dutch operator of one of Europe’s largest EV-charging networks. Total is developing next-generation EV technology through its Saft battery business.
Maybe here is the renewal for utilities cie … They have been lagging this whole market rally lately" “Charging of EV is not going to be done in the city where the gas stations are today. It will be done outside the city. At two or three in the morning the cars will go out to the substation, where you have high voltage and charge tens of thousands of cars at a time.” …. But how much energy will it take for these cars to go and back to the big charging station?
List of ETF selected for the general overview.
| ticker | Name |
|---|---|
| VDE | Vanguard Energy ETF |
| IXC | iShares Global Energy ETF |
| KOL | VanEck Vectors Coal ETF |
| URA | Global X Uranium ETF |
| UNG | United States Natural Gas Fund LP |
| MLPX | Global X MLP & Energy Infrastructure ETF |
| USO | United States Oil Fund LP |
| SPY | SPDR S&P500 |
Returns of the energy ETF over the last 3 months
Returns of the energy ETF over the last 12 months
Following GISC, the Oil & Gas (OG) industry consists of the following sectors and sub-sectors:
| Sector | Subsector |
|---|---|
| Equipment & Services | Drilling |
| Equipment & Services | Equipment & Services Cies |
| Consumable Fuels | Exploration & Production Cies |
| Consumable Fuels | Major Integrated Cies |
| Consumable Fuels | Refining & Marketing Cies |
| Consumable Fuels | Storage & Transportation Cies |
At the bottom of this file, there is the complete list of financial instruments with their sectors and sub-sectors on which the following analysis has been based on.
Let’s check the main Oil & Gas ETF returns. We have picked the following ETF
| Ticker | Name |
|---|---|
| XLE | Energy Select Sector SPDR Fund |
| XEG.TO | iShares S&P/TSX Capped Energy ETF |
| IXC | iShares Global Energy ETF |
| VDE | Vanguard Energy ETF |
| CHIE | Global X China Energy ETF |
| XOP | SPDR S&P Oil & Gas Exploration & Production ETF |
| XES | SPDR S&P Oil & Gas Equipment & Services ETF |
Usually, on shorter time frame, we use the 50 days Standard Moving Average (SMA) to see if a stock is in an uptrend. The graphs below does exactly that: it checks the percentage of stocks that are trading above their 50 days SMA. This also tell us when the sector might be over-extended to the upside or to the downside.
In this section, we check the weekly return for the last 12 weeks for all stocks belonging to the industry, sectors and sub-sectors.
We do the same graph but with a 2 weeks return and a disaggregation by sub-sector.
Now let’s have a recap table to drill in at the company level. This table has been generated with data from 04 June, 2018
Here is the list of all equities used in this report, their sector and subsector.
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